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Profitable businesses hidden from the state

Trans. by B.DULGUUN

A business earning nearly two million MNT a day is considered considerably profitable in Mongolia. Currently, private tow truck companies aiding the government to reduce traffic congestion are making this amount of profit.

Until recently, Ulaanbaatar had only two vehicle pounds and only the Ulaanbaatar City Traffic Control Center owned a tow truck company. Now, 13 companies are transporting vehicles with specially permitted tow trucks. They all have their own private vehicle pounds, which “welcome” 20 to 30 vehicles a day on an average. Penalties for illegal parking and towing fees have been lowered last year. Towing companies collect 55,000 MNT as towing fee and if a car isn’t claimed within 24 hours, the penalty is increased by 5,000 MNT for every additional day.

The reason behind the sudden increase in the number of tow companies is connected to the large sum of money companies can make through towing and vehicle pound fees, without centralizing a certain percentage of the revenue to the state budget. The 13 private companies exercising towage control in specific areas in the city are BMML, Tenuun Ogoo, Auto Grand Master, OCHUKH, Khas Trans, Achit Selenge, Avto Khuch, Bers Kharaa, Bat Zev, TISIS, Jargalan Tumur, Sydney Construction, and Khas Khishigt LLCs.

The Ulaanbaatar City Traffic Control Center is in charge of Peace Avenue and Baga Toiruu Street. Unlike private companies, the Ulaanbaatar City Traffic Control Center gives warnings before towing cars. It would be beneficial for Mongolia if these towage companies centralized some of its revenue from varies penalties collected from drivers to the state.

Parking spots are hard to find near hospitals, schools and kindergartens, so drivers park in the first lanes of nearby roads. Officials also underlined the difficulty of finding adequate places and funds for setting up car parks in the capital. Yet, these 13 companies had no problem turning its property into a vehicle pound. If funds for increasing the number of car parks are scarce, the government should generate sufficient funds from penalties from illegal parking and other traffic violations. Many would be surprised by the fact that the government is incapable of seeing, or intentionally ignoring, this gaping opportunity.

The Traffic Police Department stated, “These private companies provide free shipping services during large events and state visits when it’s urgently needed. They should be dedicating their revenue for fuel, petrol, and wages.”

This line of business can be considered very profitable, seeing as there are increased number of new tow companies. The latest solution to Mongolia’s traffic issue is the wheel lock. The ultimate role of a wheel lock is to punish drivers to prevent recurrences of illegal parking, not to cause extra trouble for drivers and other traffic participants by locking their wheels in the middle of a road.

Instead of this new locking method, which isn’t serving its original purpose, the government should be regulating and putting order to car parks with parking fees or open new car parks in busy areas such as Railway Station, customs offices, and Bayangol District Tax Department areas.

Tow companies are towing cars in open areas where cars used to freely park, claiming that the area is a carriageway. For instance, cars were towed from the open space in front of Railcom Company where taxis and cars heading to Darkhan and Erdenet used to park. The area wasn’t in fact a parking space. Without knowing this fact, drivers had to pay a penalty of 60,000 MNT every time their cars were towed. These penalties “extorted” from drivers are only filling up pockets of tow companies. Towing trucks may be necessary for reducing traffic, but at least some of its penalty should be used for social development and invested into more car parks.

Journalists from Unuudur Daily went to visit Khas Khishigten LLC, a towing company located in the western area of UB Palace Royal Hall. Some 20 cars had already been towed into the vehicle pound and in just a half an hour, three more cars were added. The vehicle pound is a grandiloquent area with high security and two huge metal doors at the entrance. A staff of the company explained that cars that have been towed have to be placed into the pound before it can be reclaimed. A young man had been hustling to reclaimed his towed car and drove away after paying 60,000 MNT.

 

The President of Khas Khishigten LLC, B.Tsogtbaatar, gave an interview for clarification.

How many tow trucks does Khas Khishigten LLC own?

Currently, eight tow trucks are patrolling.

 Since when did you start operating?

It’s only been two months since our establishment.

 How are drivers informed when their car is towed away? Some may worry about possible car theft.

We don’t get the opportunity to phone car owners directly. We only work consistent to established procedures. We established a joint centralized operator with Newcom LLC. If there’s a number stack on the car window, our towers report to the phone number 18001200 and a message from this number is sent to the car owner. However, if a phone number can’t be found on the car, license plate numbers are sent to the operator and drivers can verify their car’s location by phoning to 18001200.

 Some drivers complained that messages are sent after a long time. Can you comment on this?

That’s true. Our company has also noted on this. Sometimes, people receive the message after finding our vehicle pound in search for their car. This message system will probably improve soon once the renewed procedures are approved. We are working to reduce traffic congestion and provide better services for the public.

 Lately, the number of tow trucks have increased considerable in Ulaanbaatar. What’s the average price of a tow truck?

The prices vary a lot depending on the year it was manufactured. Our company cars are relatively of recent models. Each one costs about 40 to 60 million MNT.

 What percentage of tow fees is centralized to the state fund?

We pay tax to the state. The fees we collect are the company’s revenue. We don’t centralize specific percentage to the state.

 Do private tow companies pocket all tow and vehicle pound fees themselves?

Yes.

 

Source: http://mongolnews.mn/1h93

 

Short URL: http://ubpost.mongolnews.mn/?p=13579

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